Mumbai

Indian stock markets witnessed a sharp rally on Tuesday, with benchmark indices Sensex and Nifty trading nearly 3 per cent higher in afternoon deals, following the announcement of a trade agreement between India and the United States. Under the deal, Washington has agreed to cut reciprocal tariffs on Indian goods from 25 per cent to 18 per cent.

The 30-share BSE Sensex surged as much as 4,205.27 points or 5.14 per cent to touch a high of 85,871.73, while the NSE Nifty climbed 1,252.80 points or 4.99 per cent to 26,341.20. During afternoon trading, Sensex was up 2,411.07 points (2.95 per cent) at 84,065.30, and Nifty gained 742.30 points (2.96 per cent) to 25,828.35.

All constituents of the Sensex were trading in green, with Adani Ports, Bajaj Finance, Power Grid, Bajaj Finserv, Eternal, and InterGlobe Aviation posting gains between 4 and 8 per cent.

Experts described the trade deal as a major positive for the Indian economy and capital markets. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “The combination of the India-US trade agreement, the India-EU trade deal, and the growth-oriented Budget is expected to boost investor sentiment and market momentum.”

The announcement also drove strong gains in export-oriented sectors, including textiles, leather, gems and jewellery, seafood, and specialty chemicals.

Asian markets were buoyant, with South Korea’s Kospi surging over 6 per cent. Japan’s Nikkei 225, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng were all trading higher, while US markets ended Monday’s session on a positive note.

Mahavir Lunawat, CMD of Pantomath Capital, highlighted the benefits for Indian exporters, stating, “Lower US tariffs improve competitiveness for sectors such as textiles, engineering goods, chemicals, and auto components, creating a more predictable environment for trade and supporting export growth.”

Data from the exchanges showed that foreign institutional investors (FIIs) sold equities worth ₹1,832.46 crore on Monday, while domestic institutional investors (DIIs) purchased stocks worth ₹2,446.33 crore.

On the commodities front, Brent crude dipped 0.44 per cent to USD 65.99 per barrel.

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In the previous session, Sensex had risen 943.52 points (1.17 per cent) to close at 81,666.46, and Nifty had advanced 262.95 points (1.06 per cent) to finish at 25,088.40.